Friday, February 18, 2005

Ceylinco promotes ‘Tsunami Lending’ concept

“The poor person is a better credit risk than the rich person.”

The Ceylinco group, and Lalith Kotelawela are front page news in a story y’day (Feb 17, 2005) in the Wall Street Journal.

The story, “In Sri Lanka, loans take on key role in disaster relief” is about the tragedy of disaster victims having to go after lenders when there’s over one billion dollars in aid that has been pledged. Also it says that the government is messing with aid flow saying it will get its hands on the Tigers. Trust CBKs government to do all the bad PR Sri Lanka never needs! And it’s not just a PR thing. Messing with funds eventually means messing with victims and lives. People don’t forget these things. Of course, the private sector, inevitably scores points every time the government screws up.

Kotelawala is described in the WSJ article as “better known –and seems better trusted—than most politicians here." The ‘lending’ he’s doing is a form of micro-lending, with Ceylinco’s connection with the Grameen Bank. There’s no collateral involved, and that means a slim chance of recovery, should borrowers default. “The poor person is a better credit risk than the rich person.” Kotelawala is quoted as saying.

No surprise there. His philanthropy, risk taking, and simple charm is what makes him the Richard Branson of Sri Lanka. No minister in the government, let alone the top rung, has an ounce of his humanity and charisma.

It’s an amazing story, about how Ceylinco ran ads asking for tsunami victims to come to them for help, and the company going out on the road with 100 managers to provide instant credit.

In an unrelated article, in LMD, the Sarvodaya head, Dr. A.T. Ariyaratne, praises the private sector, saying he is traditionally not its cheerleader.